ABSTRACT:
FOR THE NINTH YEAR, THE SPECIAL SECTION ON STRATEGIC INFORMATION SYSTEMS appears in the Journal of Management Information Systems to present innovative research on the impact of information systems on organizational strategy and performance, and on the structure of new electronic markets. Earlier versions of all three papers included here were presented and published in the Proceedings of the Hawaii International Conference on Systems Science--31 in January 1998. These papers were selected from the tightly coupled HICSS minitracks on Strategic and Competitive Information Systems and Market Technostructure.
The papers in the special section this year emphasize how information technology can transform firms' capabilities and market structures, but how organizational factors often preclude the best potential utilization of the IT innovations. In particular, IT facilitates richer and more effective interaction in financial markets and can lead to more liquid and cost-effective trading for market participants. Two of the papers examine IT innovations in financial markets; the other focuses on the organizational challenges in exploiting IT innovations.
The first paper, "The Formal and Systematic Specification of Market Structures and Trading Services," by Martin Reck of the University of St. Gallen, proposes a specification language for designing market trading systems and detailing their functionality. The method makes explicit and formal the operations of the market and the trading rules imposed. Use of the author's proposed language in trading system development will integrate strategic considerations in market structure definition with technical factors in trading system specification and program design. A result should be better market designs and more flexible information systems to support trading.
In the second paper, "Culturally Induced Information Impactedness: A Prescription for Failure in Software Ventures," Lesley R. Matheson, Research Scientist at Inter-Trust Technologies, and Robert E. Tarjan, of Princeton University, describe a sequence of events in which organizational responses undermined the successful development and implementation of new software.
The third paper in the minitrack is "Restructuring Insti~tutional Block Trading: An Overview of the OptiMark System" by Eric K. Clemons and Bruce W. Weber. The paper is a case study examining a next-generation trading system, OptiMark, in which traders submit not ordinary buy and sell orders, but profiles that resemble supply and demand curves. The system will become operational in Fall 1998 as part of the Pacific Exchange (PCX), and will create an entirely new way of trading large blocks of stocks, which could have profound implications for stock exchanges and Wall Street firms.
These three papers offer a cross section of the important, current research being conducted on strategic information systems and their impacts on markets and organizations. The future is also bright for this area of research. As business innovators continue to harness expanding computer and network capabilities, there will be further advances in the strategic applications of IT. These advances will provide a growing set of opportunities to examine the implications and impacts of strategic information systems, and to guide the next generation of IT innovations.